Drumbeat: November 9, 2012

The gas shortages and long lines at the pumps in Superstorm Sandy’s wake aren’t just an echo of the oil and energy crises of the 1970s. We may be getting a sneak peek at life amid peak oil.

Peak oil — the point where fuel companies reach the limits of their ability to extract oil, decreasing production and increasing prices — has been in discussion since the mid-1950s and was a hot topic during the 2008 gas crisis. Yet seldom have Americans seen its potential impact beyond their wallets.

Federal energy officials reported that 9 of 57 petroleum terminals affected by the storm remained shut on Wednesday. Of those, seven were in New Jersey, one in Brooklyn and one on Long Island.

Still, industry experts said that the gas shortage had abated more quickly in New Jersey because most terminals in the southern part of the state were not damaged, and gas stations there are closer to major refineries and transportation routes than, say, their New York City counterparts. In addition, state officials adopted a rationing system that helped control demand, the experts said.

About 2 a.m. four wanna-be toughs nosed into a 4-foot space a driver left for a crosswalk. Gas-liners honked and cursed. The line-jumping driver gave them the finger.

“And 20 guys converge on the car, kicking the quarter panels, banging on the windows. The driver squealed away. No cops. They only come when the gas comes. But there was no gas yet.”

Another motorist tried jumping the line around 4 a.m. “Two guys in a small Honda,” said Califano. “A tough neighborhood chick jumps out and flings her leather jacket and kicks the driver’s door. ‘Me and you right now, mother——,’ she screamed.”

Gasoline rationing came to New York City and Long Island and commuter transit options expanded as the region worked to recover from the damage caused by superstorm Sandy and a snowy nor’easter.

The city and Nassau and Suffolk counties today joined New Jersey in an odd-even system for fueling based on license plate numbers. To aid commuters who use northern New Jersey train lines that remain out of service, the state is offering free shuttle buses to the Weehawken Ferry Terminal for trips to Manhattan, Governor Chris Christie said.

Residents in Tewksbury, New Jersey, haven’t seen one utility truck since Hurricane Sandy knocked out power to their town on Oct. 29, and they’re making sure Mayor Dana Desiderio knows how they feel about that.

The Republican mayor of this affluent township of about 6,000 has had people shoving her at the post office, screaming at her at the firehouse and banging on her car window as she drives by.

Crude fell, trading near its lowest level in four months amid speculation that risks to the U.S. and European economies will restrain demand while supplies increase.

West Texas Intermediate futures, little changed this week, may decline next week on concern that Europe’s debt crisis will reduce economic growth and fuel demand, a Bloomberg survey showed. OPEC cut forecasts for demand for its crude next year and said that it decreased production last month. WTI plunged to $84.44 a barrel on Nov. 7, its lowest close since July 10, after U.S. crude inventories rose for the fourth time in five weeks.

Overall, supply continues to look flat across 2012 – there is no more oil being supplied in October than there was in January. So the global economy has been growing not by using more oil, but rather by becoming more efficient with the oil it has (driven by the effects of ongoing high prices).

Demand for OPEC’s crude will decline through to 2016 because of the weakening economic outlook and growing reliance on competing sources such as U.S. shale oil deposits and natural gas liquids.

Global need for fuel from the Organization of Petroleum Exporting Countries will shrink to 29.7 million barrels a day in 2016, 1.4 million less than this year, the group said today in its annual World Oil Outlook. The estimate for 2015 is 1.6 million barrels lower than that forecast in last year’s report. OPEC predicts it may have more than 5 million barrels of daily spare production capacity as early as next year.

Abu Dhabi wants to exploit its oil reservoirs to levels far beyond current recovery rates, an ambition that analysts say would give experienced western oil companies an edge over Asian newcomers in the run-up to concession renewals.

Unemployment is only the most worrisome issue for people who are either out of a job or fear they will be, Christopher noted. On the other hand, almost everyone has to pay for things like food, gas, health care and housing — and likely has some sense of whether those bills are going up or staying the same.

Christopher’s research has shown that just a small increase in gas prices can affect how consumers are feeling about their finances, even though the cost of gas represents only a tiny portion of most people’s household budget.

Still, the fact that so many people named rising prices was somewhat surprising because consumer prices actually haven’t been rising all that much.

Natural gas producers such as Exxon Mobil Corp. spent millions of dollars this year trying to defeat Democrats, such as President Barack Obama. His re-election may end up being a boon for them.

While Obama will continue with a series of environmental regulations that would curb the production and use of coal, his policies promise to boost demand for natural gas in vehicles and power plants and facilitate domestic oil and gas output to levels not seen in more than two decades.

Canadian energy companies led by TransCanada Corp. (TRP) and Suncor Energy Inc. will likely benefit from the re-election of U.S. President Barack Obama, who analysts say will approve TransCanada’s Keystone XL pipeline.

More pipelines, including the 1,661-mile (2,673-kilometer) link from Alberta’s oil sands to refineries on the U.S. Gulf coast, will be needed as North American oil and natural gas output is estimated to surge 73 percent in the next 20 years.

Saudi Arabia has reportedly warned it will retaliate if Iran continues to intrude on the airspace and waters around its offshore oil facilities in the Persian Gulf, and reserves the right to retaliate, as Tehran’s firing at a U.S. drone last week raises concerns about an escalation in tensions in the region.

Saudi Arabia’s envoy to the United Nations, Abdallah Al-Mouallimi, has written to UN Secretary General Ban Ki-moon about Iranian intrusions on its offshore oil facilities, the official Kuwait News Agency reported this week.

New Delhi (IANS) The country’s largest oil marketing company Indian Oil Corp (IOC) Friday reported a net profit of Rs.9,611.35 crore in the quarter ended Sep 30 compared with its worst-ever net loss of Rs.7,485.55 crore in the like quarter of 2011.

Russian state-controlled oil giant OAO Rosneft (ROSN.RS) has provided the Russian government with some of the additional information it requires to approve the $55 billion buyout of competitor TNK-BP, Deputy Prime Minister Arkady Dvorkovich was cited as saying by Russian newswires Friday.

BP Plc and the lead lawyers representing victims of the 2010 Gulf of Mexico oil spill urged a judge to approve a proposed $7.8 billion partial settlement of claims, while attorneys for thousands of plaintiffs sought rejection or modification of the agreement.

In a separate courtroom in New Orleans, a second federal judge yesterday rejected a bid by a former BP engineer to dismiss one of two criminal charges related to estimates on the size of the spill. Kurt Mix, who has pleaded not guilty, was charged with obstruction of justice for allegedly deleting text- message strings from his mobile phone.

New Hampshire reached a $35 million settlement with Shell Oil Co. and Sunoco Inc. of a lawsuit over claims that the gasoline refiners and manufacturers used chemicals that contaminated groundwater.

The state sued a number of oil companies in 2003, charging that they knew the gasoline additive methyl tertiary butyl ether (MTBE) would pollute water supplies, state Attorney General Michael Delaney said today in a statement.

Floating power plants offer a unique solution to South Korea’s possible power shortages after the country shut down nuclear reactors containing uncertified parts.

The four “powerships” from Turkey can each produce about 150 megawatts of power for South Korea if the Korean government goes ahead with plans to rent them. That would make up for the expected power shortage this coming winter — a shortage resulting from the shutdown of two reactors at the Yeonggwang nuclear power plant which were discovered to have parts with forged certificates, according to The Chosun Ilbo.

The Commission’s latest strategy, Cars 2020, focuses on an innovative, competitive and increasingly green car industry, although the policy for cutting carbon emissions had to be realistic, Tajani said.

“The strategy balances the struggle against climate change with the need for competitiveness,” he said. “If we want to help competitiveness, we need innovation and clean cars.”

An oil executive once observed that burning oil for energy is like burning Picassos for heat. Oil is extraordinarily valuable as the basis for so many products we use every day that the thought of simply burning it ought to be unthinkable. So versatile are oil molecules that they can be transformed into substances that serve as clothing, medicines, building materials, carpet, skin care products, sporting goods, agricultural chemicals, perfumes, and myriad other products.

Increasingly, when we make oil-based products for homes and businesses, we are finding ways to reuse those products or recycle the materials they are made from (think: recyclable plastics). But, burning oil is always a one-time, irreversible act that leaves nothing of value behind and produces greenhouse gases and pollutants that harm us. And yet, because oil remains the most cost-effective and widely available source of liquid fuels, we are hooked on it for transportation with little prospect of substitutes on the scale we would require–unless we consider electricity.

Wind power could work almost anywhere if people turned to high-flying kites rather than relying on just wind turbines. The latest startup to run with that idea wants to harness high-altitude winds through the use of “kite surfing” technology.

Greece is planning to approve a tax on existing solar power plants of 25 percent to 35 percent of revenue to reduce a deficit related to clean energy.

The government included the tax cutting the revenue for all photovoltaic plants in its bill of economic measures scheduled for a vote tonight in the parliament in Athens, a draft of the legislation shows. It covers all solar power plants bigger than 10 kilowatts during two years.

KiOR, a renewable fuel start-up based in Pasadena, Tex., said Thursday that it had produced a crude oil made from wood chips at a plant in Mississippi and expected to refine it into gasoline and diesel and sell it commercially later this month. That would be a first for the cellulosic biofuel sector.

CU-Boulder’s renewable energy certificate is available for online distance learners, non-degree-seeking students, and working professionals of all levels who are looking for new careers or leadership positions in the field of renewable energy. This graduate-level certificate program provides an in-depth study of renewable energy technologies, policies, and business.

Sandy’s hurricane-force winds drove surging Atlantic Ocean floodwaters into her New York neighborhood Oct. 29, and the Massoni family joined thousands suddenly left homeless by the storm. With temperatures near freezing, her family has shuttled among friends and relatives while she looks at apartments like the two-bedroom in Kensington, where the $2,150 rent tops the $2,495 she got for two months from a federal relief agency.

With rental vacancy rates in the city’s Brooklyn and Queens boroughs hovering between 2 percent and 3 percent, many dislocated New Yorkers are having trouble finding a new place to live, buffeted by the forces of nature and the market. The 1,200-square-foot apartment Massoni walked through, on the second floor of a century-old row house, is half the size of her home — inadequate for her family of five. She kept looking.

As the storm chugged toward the Eastern Seaboard at 3 p.m. on Oct. 27, an engineering crew in Stamford, Conn., was at the ready. It was time.

With the click of a computer mouse, machinery on the seafloor groaned into action and a gate was slowly pulled from the deep, locking into place high above the surge from Long Island Sound.

Two days later, when storm waters from Hurricane Sandy ripped through the East Coast, much of Stamford, a city of 124,000, sat securely behind a 17-foot-high barrier that easily blocked an 11-foot surge.

WASHINGTON (Reuters) – President Barack Obama will face a two-fold challenge in energy policy in his second term: make good on his promise to act on climate change, while at the same time foster growth in oil and gas production that has spurred jobs and manufacturing.

That could mean a revival of regulations for producing and burning natural gas, coal and oil that had been on hold during the election, and possibly some new rules for hydraulic fracturing, or “fracking,” the water and chemical-intensive technique used to extract gas and oil from deep within shale beds.

With a “status quo” divided Congress focused on pressing debt and deficit issues, analysts expect Obama to use administrative tools to work toward his election-night vow on climate change.

Beneath the seafloor in northern Israel’s Haifa Bay, a vast system of vents is leaking gassy emissions into the eastern Mediterranean Sea, scientists have discovered. If disturbed, this undersea reserve could disrupt the surrounding marine environment and might even unleash greenhouse gases into the atmosphere.

CHARLOTTE, N.C. — Addressing hundreds of geoscientists here on Sunday (Nov. 4) at the annual meeting of the Geological Society of America, writer and environmental activist Bill McKibben admonished them to take action on global warming with this unusual advice:

“If you find any more oil, don’t tell anybody where it is,” he said, half-jokingly, to laughter.

“Geologists have done way too good a job finding coal and oil,” McKibben continued. “You could stop with this part of the program,” he said, to laughter. “We already have way more than we can safely burn.”

Much has been made of the so-called 2012 Mayan apocalypse. But for the real Maya people, the end of the world came slowly and timed with historic droughts.

A new, ultra-detailed climate record from a cave in Belize reveals Classic Maya civilization collapsed over centuries as rain dried up, disrupting agriculture and causing instability that led to wars and the crumbling of large cities. A final major drought after the political collapse of the Maya may be what kept the civilization from bouncing back.

CANBERRA/WELLINGTON (Reuters) – Australia will sign up to the second round of Kyoto climate commitments, Climate Change Minister Greg Combet said on Friday, but the push for global emissions cuts remained divided with New Zealand joining major countries to opt out of the Kyoto scheme.

In this publication, the American researchers (from the Universities of Colorado, Wyoming and Montana) stress the importance of what is called a ‘percolation zone’: the meltwater does not immediately join the oceans but infiltrates the empty spaces of the snowpack, then stays there and refreezes in the Winter. This phenomenon does not contradict the predictions of Xavier Fettweis’ models but put backs their coming into reality by some ten years or so at most. During this lapse of time Greenland’s contribution to the rise of sea levels is, at least in part, compensated by the storing of water in the island’s snowpack.

We need to work on this social aspect. I was on a conference call yesterday with a colleague from Bangladesh. He offered to send help because they have a lot of experience dealing with this, especially the social aspects. They’ve created in Bangladesh an explicit social network around flooding. People know: this is the group of people I’m going to be caring for. People who [live at low elevation] are connected to people who are high. That leads into this mental health aspect. If people feel part of all that, it will help. That’s why the volunteering has just been fantastic. New Yorkers are fantastic in terms of their community response. Let’s study that more. How can we nurture and strengthen those community mechanisms?

If climate scientists’ prophesies of an ice-free Arctic Ocean pan out, the world will witness the most sweeping transformation of geopolitics since the Panama Canal opened. Seafaring nations and industries will react assertively — as they did when merchantmen and ships of war sailing from Atlantic seaports no longer had to circumnavigate South America to reach the Pacific Ocean. There are commercial, constabulary, and military components to this enterprise. The United States must position itself at the forefront of polar sea power along all three axes.